Simon@0xSimonJones
srUSD update: there is now no exposure to Elixir or sdeUSD
Over the last few days, Elixir’s sdeUSD vault showed signs of potential solvency risk. Since part of srUSD’s backing was routed through Elixir into sdeUSD, the DAO has taken immediate action to protect users and eliminate any exposure.
The entire position was exited 1:1 into mF-ONE, an asset monitored by @FasanaraDigital an FCA registered asset manager. This avoided any chance of a haircut. The move was approved by the community multisig as an emergency protective step and executed with support from Selini, an existing liquidity manager within srUSD.
Critically - srUSD now has zero exposure to Elixir or sdeUSD, which has been achieved without any haircut.
During this process withdrawal demand increased sharply and the USDC buffer that supports srUSD redemptions temporarily reached zero. As a result, srUSD unstaking is currently unavailable. This is not a solvency issue. It is a liquidity timing process while assets convert.
In line with the governance approved design of the pool, we will now begin converting mF-ONE and other srUSD assets into USDC. Unstaking will reopen once the buffer is replenished. We will keep the community updated as conversions settle and we have a clear timeline.
To be clear - trading remains fully operational on Reya. rUSD remains fully backed 1:1 by USDC and is unaffected.
We had already planned to remove Elixir as a liquidity manager, as floated in this recent governance post reya-network.discourse.group/t/rnip4-lm-rot…. Once withdrawals resume, governance will confirm migration of liquidity to Amber and Selini. APY is temporarily lower during this transition and will normalise as assets move.
Our priority has been simple: protect srUSD users and avoid any loss exposure.
Thank you for your patience as liquidity rotates back into USDC and srUSD unstaking comes back online
